Welcome to the blog of a living being on planet Earth, a holder of (man-mandated) citizenship of India, and so on and so forth! I hope you find it worthwhile to observe the parts of my journey in this lifetime that I share here. "natant" means floating.

February 07, 2013

who owns bombay stock exchange (bse)?

Here is a story I did, 2-3 months back, in the newspaper I work for, on the shareholders of BSE (Bombay Stock Exchange):

Shapoorji Pallonji & Company picks stake in BSE

BSE saw minor but interesting changes in its
shareholders in the period between June 2011 and August this year

Even as its proposed initial public offer has been in the
offing for the past few years, BSE, or Bombay Stock Exchange as it was legally
known as earlier, its non-broker shareholders are staying put. BSE is the
second largest stock exchange in the country after the National Stock Exchange
of India.

A FC Research Bureau analysis of BSE's shareholding
structure, as available in the exchange's filings with the Registrar of
Companies (RoC), revealed that while the list of shareholders had about 1,000
new faces with the number of shareholders climbing from 5,762 as of June 17
last year to 6,797 as of August 31 this year, the largest 23 shareholders who
together continue to account for 53.92 per cent stake in the stock exchange,
made absolutely no change in their holdings.

This effectively meant the dramatic rise in shareholder
numbers took place in the 40-odd per cent holdings by over 6,700 shareholders,
a vast majority of whom would be BSE's broker-members who were given shares in
the exchange when the trust-run exchange converted itself into a corporate body
a few years ago as per the Securities and Exchange Board of India's
demutualisation norms for stock exchanges.

Beyond the largest 23 shareholders, the largest and the most
interesting change was in the entry of construction major, Shapoorji Pallonji
and Company, which took a 0.24 per cent stake in the period between June 2011
and August this year. While the price at which this stake was got and from
which it was purchased was not immediately known, it made Shapoorji Pallonji
the 24th largest shareholder in BSE.

The company's co-managing director, Cyrus Pallonji Mistry,
was picked up recently by Ratan Tata to succeed him as the chairman of Tata
Sons. Cyrus' elder brother, Shapoor Pallonji Mistry is the other co-managing
director of the company which besides it recent stake purchase in BSE, had
investments, at cost, in subsidiaries and non-subsidiary companies to the tune
of Rs 1,105 crore at the end of March 2011 (up sharply from previous year's
level of Rs 762 crore).

The only other significant change gleaned from RoC filings
of BSE was the entry of more than one venture capital firms as stakeholders
with an aggregate stake of 0.51 per cent in the stock exchange. One of them was
clearly seen to be a Mumbai-based firm, A R Venture Funds Management, which had
a 0.14 per cent stake as on August 31.

The largest shareholding in BSE continued to be held jointly
by Singapore Exchange and Deutsche Borse who hold 4.92 per cent stake each in
BSE. The other large shareholders include Life Insurance Corporation of India
and State Bank of India (see table).

Figures
in per cent, represent stakes held in BSE as on August 31 2012

In the previous year-to-year period, a US-based private
equity firm, Argonaut Ventures, had increased its stake in BSE from 2.54 per
cent at May-end of 2010 to 4.75 per
cent in mid-June of 2011. At that time, Argonaut Ventures was a Sebi-registered
foreign institutional investor sub-account operating under main FII, US-based
George Kaiser Family Foundation.

The other major change in that period involved Dubai
Financial Group selling its entire 3.88 per cent stake to a George Soros Group
hedge fund, Quantum (Mauritius), in August 2010, for a reported sum of $35
million (about Rs 163 crore at that time).

Some large shareholders in BSE also hold
relatively large stakes in
its rival, NSE. LIC and SBI, for instance, were the largest two
shareholders in NSE as of September-end last year with respective
stakes of 10.51 per cent and 10.19 per cent. At that time, on NSE,
Quantum (Mauritius) held 0.86 per cent stake, MSPL along with it
Baldota brothers promoters held 0.94 per cent and S Gopalakrishnan
(then executive co-chairman of Infosys Technolgies) held a 0.38 per
cent stake.